HI all. It is Saturday evening and one last post and answer part. --LOV; I use long and the longer the better. You are saying shorter term than I like. City; You are correct, the real value comes when you are able to let all expire. Of the accounts i trade, many look somewhat natural until finally they expire and bingo big money. ihaveo's; there are different situations but when the TV gets to 1.5 or 2 i start thinking of rolling. If the option is out of the money I will let it run, if in the money i start thinking of rolling. There is probably questions I have not answered but other have or tried to help. But to sum it up i want to have a call option that is ITM and around 10 pts ITM (in the money) Keep doing that until the stock takes a breather and all expire worthless and you finally collect the money. Tomorrow I will be off the grid and catching nice rainbows with my flyrod. You guys are in charge and keep the market under control. It will be a week before i even see the Greek results.

A different idea on trading

Hi all, here is an idea for a slightly different way to trade on a vertical spread. I am using AAPL as it has seemed to have bottomed out and it also has great premiums. This is on the same idea of trading in the money covered calls. With AAPL trading around 581, I am looking at buying Jan 2014 570 strike for $111, and selling the June 16th 570, for 14.25 This is of course 3.25 of time value. The idea is if AAPL keeps going up I will continue to sell the 570 for the next two weeks and with two weeks left in the July cycle I will roll up 5 points and go out to the July 21 and take another credit. If aapl has not gone up much I might continue to sell the 570 strike for the next week without going out to the next two weeks. So the idea is to stick with the strike you have even if the stock is going up some and when you reach the point where there is two weeks left in the next period, jump to that option and roll up 5 points. By using Jan of 2014 you have approximately 77 weeks of taking in 2 or 3 points of credit when rolling. In a perfect world AAPL will be around 700 in a year and a half. If so your 2014- 570 would be worth 130 for a net gain of 19. And if you were lucky enough to make 2.5 points a week for 77 weeks it would be a gain of 192 points of pure profit on the calls sold. You would also make around 33 points of profit on the original bought call of the 570. This would be a net gain of 192+33 = 225. This could mean a ROI over 200% in a year and a half. A lot of if’s but something to consider. I am going to do it with maybe 20 positions. I will keep you posted on the ROI.

Well this was the week from hell for the market. My trades went fine as I look for little profit and lots of cushion. I hope all of you have had the same good luck. The difference between us (cushion addicts) and the rest of investors, especially option investors is that we go for consistent lower returns. We expose ourselves to little time and we leave lots of cushion. It is that easy to make 1-2% a week. After 5 months the DOW is about even and the S&P also. Friends, it is that easy to beat the market. But it takes discipline and a plan. Step by step and profit by small profit you can beat the market. I enjoy all the contributions by you guys. It is fun for me to see new ways to trade these options. There are so many ways but most successful ways limit time and add cushion. Good luck all Jerry

Hi all, Well this May is some proof that the old saying in the stock market that says ‘Go away in May,’ sure provided some insight. With world events and even those closer to home in a confused stage, I advise anyone that is trading to be very careful and avoid holding positions over weekend (especially long weekends like this memorial weekend.) There are just too many things going on. Will Greece pull out of the euro? Will Iran get the bomb. Will U.S. bonds get downgraded again etc etc. There are plenty of positions that will open on Tuesday or Wednesday that offer cushion and little time left in their life. An example is the SPX (sometimes with different brokerages called $SPX.X) It is trading around 1317 and you can buy the 1225 and sell the 1230 put for around 1% in a 4 day trade. You can also add to the same trade and turn it into a condor by selling the 1365 and buying 1370 call. This also makes around .05 so it now is a 2% trade. The put side has 87 points of cushion and the call side has around 50 points of cushion. There are other examples using a stock like CMG with the 330/335 put. I certainly would not use a stock that doesn’t offer weekly options. I would not be holding a position over several weeks as there are just too many factors pulling the market in different directions. You want to expose yourself to little time and keep lots of cushion. There is no reason to open dangerous positions just because you ‘think’ the stock has fallen as far as it can, etc. The point is to not get close to any current stock price. The market is just too volatile. I want to emphasize that you need to be very careful in this market. There is plenty of money to be made using common sense and careful positions. Cushion and Caution…

Hi Guys & dolls, I have been busy with a lot of projects. Nothing exciting just routine. M&M I might look at OXY I used them a year or so ago. I like the stats you sent showing low volatility. What’s with GOOG today? I haven't looked into the whys yet... AAPL held its ground sort of today. It was up around 12 at one time. I worry about Nicky. Hope it wasn't too bad. Options have such leverage both up and down. Care must be taken and caution used in a time when Europe is in such flux and unrest. (go away in May if you want to trade another day) For newer traders, I must again say caution and cushion. Don't start using a stock and think it is the only one out there. evaluate each trade for the what if.. type move. My advice for bullet proof trades, open on a Wednesday and look at weekly’s with lots of cushion. If plain old naked puts are you style, pick up crumbs, don't reach for the whole loaf of bread. If spreads are you way then pick stocks to use on Wednesday and still lots of cushion. Look at Iron condors as they are just a spread on each side of the current stock price. Good luck Jerry

HI all, amrit... You are correct we all get tunnel vision regarding the stocks we get to know on a very personal level. But if we go overboard at times forgive us. We do like and look forward to everyone’s comments. I had an Iron condor that just expired with aapl. I see that there are several other stocks and index that offer the same cushion and will be 1 to 1.5% weekly. I received a lowly 350 and used 19000 in maint but that is 1.8% ROI.. Jeeze and nearly worry proof. Maybe I’m doing it the hard way with the long calls and weekly sold calls? We have all evolved and learned from each other. Keep up the good work. I am also posting this as a new post as the thread is getting long. Jerry

Hi all, With AAPL hitting bottom and finally moving up those of us using them will finally breath a little easier. Also GOOG took a leap forward today. Still in/on my mind is the old saying of ‘Go away in May’. Meaning that the market is usually not bullish and hard to make money. I have many of the aapl Jan calls and I am letting them lose some value but selling calls weekly and putting cash in the bank while waiting. A decent play might be the SPX. It is trading around 1370 and some great puts or spreads even Iron condors available with lots of cushion on the weeklys. If you still like aapl trading at 570, as I do, you can do spreads with 40 points of cushion or even naked puts and make 1% a week or better. Folks this is free money as good as gold. Also Goog, trading around 610. The Iron condor using the 565/570 puts and the 645/650 call will make 2% pretty safe. There is lots of money out there so pick your spot and cash in. Cushion – cushion.. the answer to good sleep and good profits